The passage of the amendments to the Foreign Investments Act (FIA), Retail Trade Liberalization Act (RTLA) and Public Service Act (PSA) could lead to higher salaries for workers, even without increasing the minimum wage, the Department of Finance (DOF) said yesterday.
In its latest economic bulletin, the DOF said over the medium- to long-term, the passage of the amendments to the said economic liberalization measures will help bring in more employers in the country.
“The recent signing into law of the amendments to the RTLA, FIA and PSA is a welcome development towards faster economic recovery and, ultimately, better employment opportunities,” the DOF said.
“More employers seeking skilled labor could translate into higher offered wages. This market-based mechanism raises salaries even without increasing the minimum wage,” it added.
Early this year, Karl Kendrick Chua, socioeconomic planning secretary, said the measures will be crucial to the country’s recovery, as easing foreign ownership restrictions will attract more investment, generate employment, introduce innovation, lower prices and improve the quality of goods and services.
“There’s actually a precedent in previous years, when we further opened up the banking sector in 2014, and also earlier, 20 years ago, in the 1990s. We saw immediately several foreign banks entering and serving the people and the businesses, especially when we have trade or transactions with these countries. There were six foreign banks that entered the country actually, because of this liberalization. And we expect the same for the PSA, for the FIA and the RTLA,” Chua said.
“The World Bank estimates that output would increase by three and two percent for transportation and telecommunications, respectively, if we ease the restrictions, ownership restrictions, in these two critical sectors. And would also increase employment by 2.8 and 1.8 percent. And because you make these two sectors more competitive and help them grow, all the other sectors in manufacturing are expected to grow because of lower prices and better quality of service from these very important two sectors,” he added. – Angela Celis
